Blue Jays, The Tank, And A Possible Solution

The success of the Astros and Cubs in using high draft picks to rebuild has led to a “tanking epidemic”.  Does it make sense, and what can Major League Baseball do about it?

The Cubs and the Astros used to be bad.  Really bad.  In fact, from 2012 to 2015, the Cubs’ average draft position in the amateur draft was 5th.  Houston?  2nd, including three consecutive #1 picks.  Painful at the time, perhaps, but those teams are now enjoying the services of players like Carlos Correa and Kris Bryant, and their fans are enjoying World Series flags.

This is nothing new.  Kansas City and the Mets used similar strategies.  But this strategy has now moved into the mainstream, with other teams watching this model for success with great interest.  Seattle’s Jerry Dipoto suggested (possibly half jokingly) that there were more teams playing in 2018 for the #1 pick in 2019 than are playing for the World Series.  Even our old pal Edwin said that there are many teams who “don’t want to win“.

Is the first pick that valuable?

Some might argue that the difference between a #1 pick and a #5 pick is smaller in baseball than in other sports.  Take hockey, for example.  In two of the the last three drafts, there has been a consensus #1 pick (Matthews, McDavid) and Dahlin is a consensus #1 in 2018.  In baseball, it is frequently less clear as to who will go #1.  So why so much effort to chase that pick?

Toronto Blue Jays

Two reasons.

First, while a top-5 pick is no guarantee of an All-Star (*cough* Mark Appel *cough*) there is a significant drop off in expected value from the top five picks to the next five.  It was estimated in 2014 that an average top-5 pick will earn $54 million of “profit” in his first six years of team control, while a #6-10 pick would average $29.5m. The gap might be even larger now.   So a top-5 lottery ticket, while still a lottery ticket, is still worth almost double what a 6-10 ticket is, on a probability basis.

Second, and more subtly, is the effect of a top pick on bonus pools.  Teams have a limited pool to sign amateur players in each year’s draft.  That pool is calculated based on the picks that each team has.  For example, in the 2018 draft the Royals have a draft pool of $12.8 million while the Dodgers have a pool of only $5.3 million.  The impact of the #1 pick is huge – in 2018, the #1 pick (Tigers) comes with an $8 million slot.  So that one player alone has a higher slot than all of the Dodger picks – and higher than the Blue Jays’ aggregate slot of $7.9 million.

https://twitter.com/jacobbogage/status/985900646778929152

It has been common in recent years for teams drafting at the top to pay those players less than full slot, and to use the saved slot money on other picks.  As for example – in 2017, the two picks from the top three that signed had an aggregate slot of $14.4 million but signed for $13.4, or 93%.  In 2016 this figure was 70%, and in 2015 it was 85%.  In each case, teams could use the money saved to pay extra to “hard signs” in later rounds – as for example when Houston paid Daz Cameron $4 million in 2015 despite a slot value of only $1.7 million.  If having the #1 gets you not only a Carlos Correa but also a Daz Cameron, it is pretty darn valuable.

Why do we care?

The primary problem with tanking teams is the unbalanced schedule.  A team in a division with multiple weak teams (like the AL Central in 2018) has an advantage over a team like the Blue Jays, who play in a stronger division.  If the teams in the weaker division exacerbate the situation by tanking, this gap becomes even wider.  So if the Royals/White Sox/Tigers are actively looking to lose in September, and the Jays and Twins (say) are in competition for the second AL wild card ….

So what is the answer?

For one possible solution, we could look to the NHL.  In hockey, the worst team in the regular season does not automatically get the first overall pick.  Instead, the bottom fifteen teams enter a lottery for the first, second and third overall picks.  The worst team has a higher percentage chance of winning the lottery (18.5%) than the 15th worst team (1%), but 18.5% is far from a guarantee.  As such, the incentive for a team to tank is greatly (though admittedly not completely) reduced.

A second solution, though one that would be much harder to implement, would be to move away from the current unbalanced schedule model, either to a fully balanced schedule or to a less unbalanced one.  This would give every team equal access to the weaklings.  But the potentially adverse impact on TV ratings might make this solution unworkable.

Next: Blue Jays bring up Gurriel, demote Ngoepe

The bottom line

With the increased emphasis on home-grown talent and the ever-higher price of premium free agency talent, it is likely that the tanking strategy is here to stay.  MLB will eventually have to do something to address it.  The lottery option might well be the most workable solution.